Kay, i was playing Halo 3 and my Xbox let out this awful sound, so i quit the match, then went to the dashboard and opened the disc tray only to see a brutal scratch round the disc.

The game still works but only if i take out then put it back in a few times, anyway, is there any 'home-made' method to remove a scratch, no game or video shops around me do disc repair.

Skip doctors can be bought at most Best Buys, they basically grind out deep scratches into curves, they work most of the time.

OR

See if there is a Play N Trade near you, they do disk repairs for a couple bucks.

OR

Rub toothpaste into the scratch, and then wipe off any excess. It works as an abrasive and fills in the scratch. Sometimes it works, sometimes it doesn't.

I've personally never tried to toothpaste method, but as mentioned try one of the Disc Doctor kits that you can purchase pretty much anywhere, wal mart, rite aid, longs ect ect. Usually about 10 bucks and should get the job done for ya.
Good luck